There are a number of different definitions out there, which describe the term Project Portfolio Management or short PPM. The one, which I like to use, is the following:
Project Portfolio Management Definition:
Project Portfolio Management or PPM is: Having the right resources, at the right time, on the right projects, in order to achieve organisational goals and targets.
This might sound easy – but when you deal with several projects and programs with possibly hundreds of people working on projects at the same time, than this can get tricky and complicated.
Lets have a closer look at the different parts of the definitions:
Having the right resources at the right time:
A resource can be a human person, a physical object or a piece of technology (e.g. software).
Good Portfolio Management practice should guarantee that you have the right person, with the right skills, with the right equipment for the right job at the right time in order to deliver your project successfully.
For example: If a new software development project starts, you would like to have a Project Manager on your project, which has done a number of software projects before (right resource). You also want to make sure this person has a desk, a laptop and access to certain software products, for example Microsoft project or required in house systems (physical and technology resources) and this person is currently not working on any other project (at the right time).
In addition, you would need to find the right project team, which has experience in developing this kind of software (and there are plenty of different software skills out there), and the people would need to be available at this particular point in time.
The right projects:
The right projects are those who help the organisation to achieve their goals and targets in the shortest possible time, with a good cost / benefit ratio.
This might be particular difficult when it comes to business and budget planning. Typically once a year projects and budgets will be set. The business will put forward a number of projects, which they would like to do. Normally you have more projects than there is a budget. The key is now to prioritise and select the projects based on business benefits and contribution. This process can take some time, but it’s worthwhile doing. An example would be: You have $1m available to spend, which equals 10 projects. The business put forward 40 projects, which seem all equally important to them. Your tasks it to provide recommendations on which ones to choose. How would you go about this? This questions lead to the last part of the definition.
In order to achieve organisational goals and targets:
To help reaching the organisational goals and targets the Portfolio Manager or PMO would need to know what exactly the target is. This should be defined in the companies’ strategy, which should be communicated and known within the organisation.
Targets and goals can be: Increase market share by X%, increase sales by X%, increase online presence – direct channel by X%, or improve customer satisfaction by X.
Before a project commence, a project business case needs to state how much the contribution to a particular goal is, when the project will be finished and what are the cost / benefits.
With this information a PMO or Portfolio Manager can provide suggestions and recommendations to the Executives on how to manage the project portfolio best.
This is a quick and short version about my definition on Project Portfolio Management. I hope you find it useful and can relate to this. Do you have a similar definition of the term Project Portfolio Management? Let me know.